Caxabank and Bankia merge, making Spain the largest bank

Caxabank and Bankia merge, making Spain the largest bank

The Board of Directors of Bankia and Casaban Bank have agreed to merge, which will give a boost to the Spanish banking sector.

Pierre Philippe Marco, Gabriel Boys AFP

The boards of Spain’s Caixabank and the state-owned Bankia have approved a merger plan between the two lenders, which would make the country the largest bank by market share in retail operations.

In terms of the deal, Caxcabank will offer 0.6845 shares for each of its Bankia shares, according to a release released on Friday. The companies said the new entrant, which will keep the Caxabank brand, will have assets worth 64 6464 billion (.. 6.7 billion).

The merger plan still needs approval at the general shareholder meetings of both companies And by competition officials. Banks said they expect the process to be completed during the first quarter of 2021.

“With this operation, we will become a leading Spanish bank at a time when creating an entity with significant size is more important than ever, thus contributing to supporting the needs of families and companies and strengthening the financial system.” Stated in a statement.

Gorigolzzari will be the executive chairman of the new company, and Gonzalo Gortzar, the current CEO of Caxabank, will be the CEO.

European lenders are under significant pressure in the wake of the global financial crisis and subsequent ultra-loose monetary policy. In addition, the shock created by the coronavirus epidemic earlier this year has further accelerated their issues and could be a compromise to reduce consolidation costs and make the business more profitable.

See also  Californians asked to conserve vitality on Friday due to warmth

Banks said in a statement that the solid equity position of Caxabank and Bankia will provide the ability to absorb re-formation cost and valuation adjustments, achieving a combined entity CET 1 ratio of 11.6%.

The CET1 ratio, introduced in the wake of the global financial crisis, is a measure of capital strength.


Please enter your comment!
Please enter your name here